“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
A 20-year buy-and-hold investment in MGM Resorts International (NYSE: MGM) produced a positive result, but not a particularly strong one. Using dividend reinvestment, a $10,000 investment made on 08/04/2006 would have grown to $13,497.33 as of 08/03/2026. That translates to a total return of 35.05% and an annualized return of 1.51%.
The result is notable because it shows the gap that can emerge between a stock posting an absolute gain over a long period and a stock delivering a compelling compounded return. For MGM, the 20-year holding period included dividend income, but the overall outcome remained modest, reflecting the cyclical nature of the casino and hospitality industry, the heavy capital demands of large resort operators, and the effects of major economic disruptions over time.
MGM 20-Year Return Details
| Start date: | 08/04/2006 |
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| End date: | 08/03/2026 | ||||
| Start price/share: | $34.93 | ||||
| End price/share: | $44.50 | ||||
| Starting shares: | 286.29 | ||||
| Ending shares: | 303.47 | ||||
| Dividends reinvested/share: | $1.62 | ||||
| Total return: | 35.05% | ||||
| Average annual return: | 1.51% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $13,497.33 | ||||
These figures imply that capital appreciation did most of the work, while dividends contributed only modestly to the ending value. The share price rose from $34.93 to $44.50 over the period, and dividend reinvestment increased the share count from 286.29 to 303.47. The result was a gain in nominal dollars, but one that compounded at a low rate for such a long holding period.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
What the 20-Year Return Says About MGM Stock
MGM Resorts is a consumer-cyclical business tied to discretionary spending, travel demand, convention activity, and gaming volumes. That business mix can generate significant upside in favorable environments, but it also introduces volatility that differs from more defensive sectors. Over a 20-year period beginning in 2006, investors would have lived through the global financial crisis, a severe downturn in Las Vegas real estate and tourism, and the pandemic-era shock to travel and resort operations. Those events help explain why a long holding period did not automatically translate into a strong compounded return.
The key point is that duration alone does not guarantee satisfactory performance. Buy-and-hold investing can be highly effective when business quality, valuation at entry, balance sheet resilience, and capital allocation align. When those factors are mixed, a patient investor may still earn a gain, but not necessarily one that compares well with broader equity benchmarks or even with the opportunity cost of holding alternative assets.
How Much Did Dividends Matter?
MGM paid a total of $1.62 per share in dividends over the full holding period used in this analysis. Reinvesting those dividends raised the share count by roughly 17 shares, which modestly improved the final value. That is an important distinction: total return includes both price change and cash distributions, and reinvestment can have a meaningful effect over time. In MGM’s case, however, the dividend contribution was relatively small compared with the overall holding period.
Based on the most recent annualized dividend rate of $0.01 per share, the current yield is effectively negligible at the quoted share price. Expressed as yield on cost against the original purchase price of $34.93, the annualized payout is likewise near zero. That makes MGM fundamentally different from classic income-oriented dividend stocks, where a larger portion of long-term return may come from recurring distributions.
Key Takeaways From This Buy-and-Hold Example
- A $10,000 investment in MGM grew to $13,497.33 over 20 years with dividends reinvested.
- The total return was 35.05%, equal to an annualized return of 1.51%.
- Price appreciation accounted for most of the gain; dividends were a minor contributor.
- The result illustrates how cyclical exposure and major economic disruptions can weigh on long-run compounding.
- A positive absolute return does not necessarily mean a strong long-term investment outcome.
Bottom Line
MGM’s 20-year buy-and-hold return demonstrates that patience, by itself, is not enough to produce attractive compounding. The investment remained profitable on a total return basis, but the annualized gain was limited. For long-horizon investors, this kind of result underscores the importance of separating a company’s brand recognition and operating scale from the actual return profile delivered to shareholders over time.
